Indexes and Bonds courtesy of Investing.Com
Well, That Was Fast
Smack in the face of yesterday's rally attempt on very dovish Fed comments, both the stock and bond markets revolted today.
Yesterday's Action
Indexes and commodities courtesy of Investing.Com
Yesterday the Nasdaq rallied under 400 points. As I type, it is now down over 600 points.
Six Things Guaranteed to Be Transitory
Six Things Guaranteed to Be Transitory
— Mike "Mish" Shedlock (@MishGEA) May 4, 2022
1. Rate Hikes
2. QT
3. Notions of a Soft Landing
4. Perceptions that Cathie Wood is a genius stock picker
5. Belief that stocks are cheap and home prices reflect fundamentals
6. Jerome Powell's alleged credibilityhttps://t.co/T7dG0ntJ1u
Stocks, Gold, Oil, Rip Higher as Dovish Powell Wins Hoot of the Day Award
That was my observation after yesterday's action. In my post, Stocks, Gold, Oil, Rip Higher as Dovish Powell Wins Hoot of the Day Award I also made these comments.
The reaction today does not change in the least. We are now in a bear market. This is another Fed-induced bear market orgy that won't last.
All Powell can do is prolong the pain. How is the jump in crude today in the Fed's (or anyone's) best interest?
Powell would be better off getting it over with. But he won't. And he is clueless about what's coming.
The longer the Fed tries to stave off recession, the deeper it ultimately goes. We are headed for a waterfall event.
Hoot of the Day
- Reporter to Powell: "Do you think the Fed has a credibility problem?"
- Powell: "No, I don't .... And I want to keep it that way."
That was from the post FOMC Q&A video that I watched.
For his performance, and arrogance, Powell wins my Hoot of the Day award by a landslide.
Cathie Wood Bonus Hoot
What a Hoot.
— Mike "Mish" Shedlock (@MishGEA) May 4, 2022
However, I already posted my Hoot of the Day winner.
If it's any consolation, I will give you the silver medal.
Nice try, but Powell wins.https://t.co/T7dG0ntJ1u pic.twitter.com/uCb6XyRQQR
Beautiful Observation by Suburban Drone
Today was the biggest FOMC rally since March 3rd 2020 when the Fed CUT rates .5%. You can't make this shit up. Of course it's all options-driven vol unwind.
— Mac10 (@SuburbanDrone) May 4, 2022
After that the wheels came off the bus. pic.twitter.com/vRNNGhiUwx
Stopped Already
Out of SPX and credit spreads (LQDH) shorts here.
— Alf (@MacroAlf) May 4, 2022
Very dovish Powell, opening the room for another temporary squeeze in risk assets that he'll need to stop at some point...
Yesterday and Today
Yesterday: "This is another Fed-induced bear market orgy that won't last."
Today: "Well, that was fast"
Panic Buying Turns to Panic Selling
Since 245pm, I count about 30 or more TICK Index prints above 1500. That is an insane amount. Looks like one massive buy program. Can barely find one stk down on the 200 I monitor. Up 2% to up 6% all.
— Mark Neuman, CFA (@MarkNeuman18) May 4, 2022
Nobody has exposure pre-245pm it seems, can smell FOMO. See crypto, get me in!
Tick counts are a measure of stocks bought on upticks (rising markets) or downticks (declining markets).
Sustained counts over +1000 is panic buying, under -1000 is panic selling.
My hoot of the day is this observation "Panic Buying Turns to Panic Selling".
Will add a tick chart as soon as I have one.
Repeating Comments Made Many Times
The S&P 500 could and probably will decline 50% from the top. And if it does stocks will not even be cheap.
I repeat my April 22, 2022 message Expect More Stock Market Pain Because It's Coming
By the way, If You Think I'm Bearish Please Read John Hussman.
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